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1993 DIGILAW 44 (KER)

Athickal Rajan v. Registrar Of Co Op Society

1993-01-21

K.SREEDHARAN, MAMIDANA JAGANNADHA RAO

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JUDGMENT M. Jagannadha Rao, C.J. 1. This appeal is preferred against the judgment of the learned Single Judge in O.P. No. 113 of 1993 dated 14-4-1993 dismissing the Writ Petition. 2. The impugned order is Ext. P4 dated 21-12-1992 is passed by the fourth respondent, Administrator, who has been appointed in respect of the Society subsequent to the expiry of the term of the Managing Committee as per the Ordinance dated 7-2-1992. The Ext. P4 order, in our opinion, is perfectly valid and is in implementation of the judgment of a learned Single Judge of this Court in Janardhanan v. Joint Registrar, 1990 (1) KLT 530 , and therefore the petitioner cannot be permitted to question Ext. P4 order, which is merely consequential to the above judgment of this Court which has become final. 3. The society's share capital was Rs. 40 lakhs on 18-5-1987 and was fully paid-up. Therefore, there was no scope for enrolment of new members, unless the share-capital was increased. However, the than Managing Committee enrolled as many as 4668 members in one stroke on 1-7-1987 and issued share certificates to them, although there were no shares for allotment and the entire share capital of Rs. 40 lakhs had been paid up. However, the Joint Registrar of Cooperative-Societies, Kannur, passed an order subsequently on 27-7-1987 granting ' permissible sanction' for amendment of bye law 5 subject to the condition that the bye law shall be amended as per R.9 of the Rules framed under the Kerala Cooperative Societies Act within six months from the date of the said order. The Joint Registrar's sanction is after the enrolment of members. The enrolment was on 1-7-1987, while the permissive sanction for amending the bye law was on 27-7-1987. One Janardhanan complained to the Joint Registrar about the violation of the bye laws and unauthorised enrolment of new members by Petition dated 7-8-1987. To this petition, the Joint Registrar replied on 20-8-1987 stating that he had given permissive sanction to the Society to amend the bye laws for enhancing the share capital from Rs. 40 lakhs to Rs. 1 crore as per his proceedings dated 27-7-1987, and therefore he regretted his inability to do anything in the matter. Thereafter the said Janardhanan obtained a copy of the order of the Joint Registrar dated 27-7-1987 and challenged the same in the Writ Petition, O.P. No. 7502 of 1987. 40 lakhs to Rs. 1 crore as per his proceedings dated 27-7-1987, and therefore he regretted his inability to do anything in the matter. Thereafter the said Janardhanan obtained a copy of the order of the Joint Registrar dated 27-7-1987 and challenged the same in the Writ Petition, O.P. No. 7502 of 1987. The said Writ Petition was allowed by Viswanatha Iyer, J. and the judgment is reported as Janardhanan v. Joint Registrar, 1990 (1) KLT 530 . The learned Single Judge held that the permissive sanction given by the Joint Registrar was illegal, "and that it did not in any event amount to permission to ratify the enrolment of 4668 members on 1-7-1987, when there was no share-capital to be allotted. The learned Single Judge further declared that the Joint Registrar should not have permitted the amendment of the bye law without a resolution of the General Body of the Society, and that the action of the Joint Registrar was wholly unauthorised. It is therefore to be noticed that the learned Single Judge allowed the Writ Petition, and quashed the proceedings of the Joint Registrar dated 27-7-1987 giving permissive sanction even without resolution of the General Body for enhancing the share-capital and for amending the bye laws. 4. In our view, the effect of the said judgment is to declare the enrolment of 4668 members on 1-7-1987 as also the permissive sanction dated 27-7-1987 of the Joint Registrar as being wholly unauthorised and without jurisdiction. 5. It is subsequent to the above said judgment that the General Body held a Meeting on 3-4-1990 and passed a resolution to enhance the share capital and to enrol new members. In the resolution dated 3-4-1990, the Managing Committee resolved that the share amount of such members who are unauthorisedly enrolled earlier should be kept in the suspense account. In otherwords, the share amount of the said members was kept in the Suspense Account on 4-4-1990 and remained as such. In the meantime, the State Government promulgated an Ordinance on 7-2-1992, and on that basis an Administrator was appointed to manage the affairs of the Society. 6. Thereafter the Administrator passed the impugned order Ext. P4 dated 21-12-1992 under S.65 of the Act and held that 4668 members were enrolled on 1-7-1987 without there being any share capital to be allotted, and the same was illegal and unauthorised. 6. Thereafter the Administrator passed the impugned order Ext. P4 dated 21-12-1992 under S.65 of the Act and held that 4668 members were enrolled on 1-7-1987 without there being any share capital to be allotted, and the same was illegal and unauthorised. He also came to the conclusion that the applications, if any, filed by the said 4668 members before their illegal admission on 1-7-1987 should not be treated as pending applications. 7. The Administrator further held that the resolution dated 24-6-1990 passed by the previous Managing Committee admitting the very same 4668 members on the basis of their earlier applications prior to 1-7-1987 and on the basis of the resolution, dated 3-4-1990 to amend the bye law was also illegal. In our view, this decision of the Administrator is also perfectly valid. It is true that the then Managing Committee which even met on 24-6-1990 considered the admission of 4668 members once again in that meeting. But, the position was that after the resolution was passed on 3-4-1990 for enhancing the share capital and in the meantime to return the amount paid by 4668 members by keeping it in Suspense Account, there was no valid application pending with the Society. The earlier applications had resulted in the enrolment which was held to be wholly illegal and without jurisdiction. In our view, the said applications would never be treated as pending. After the amendment of the bye laws subsequent to 3-4-1990 it was incumbent on any new member to file a fresh application in accordance with R.16(2) of the Rules. Further, the resolution dated 24-6-1990 suffers from another serious infirmity. The Committee could not have enrolled 4668 members at one stroke again on one day by merely ratifying the earlier enrolment on 1-7-1987. It was not open to the Managing Committee to ratify something which was declared wholly illegal and without jurisdiction by this Court in Janardhanan v. Joint Registrar, (1990 (1) KLT 547). That would amount to superseding the judgment of this Court by the Managing Committee, which has become final. One other reason as to why the resolution dated 24-6-1990 was not accepted by the Administrator was that it was signed only by three members, whereas the total strength of the Managing Committee was nine. It is true that the Administrator has accepted that at the beginning of the meeting there were five members. One other reason as to why the resolution dated 24-6-1990 was not accepted by the Administrator was that it was signed only by three members, whereas the total strength of the Managing Committee was nine. It is true that the Administrator has accepted that at the beginning of the meeting there were five members. But it is not known why only three members have signed after the resolution was passed. That would also raise a serious doubt as to whether all the members were present at the meeting till the resolution was passed, the quorum for the meeting being five. 8. In our view, the decision of the Administrator holding that the above said 4668 members whose membership was declared by this Court in Janardhanan's case as illegal and without jurisdiction, could not be treated as valid members is perfectly valid, and in fact, it upholds the decision of this Court in. Janardhanan's case and gives effect to it. Ext. P4 is therefore passed in implementation of the judgment of this Court, and therefore, the petitioner cannot be permitted to assail it on any ground. 9. Lastly learned counsel for the petitioner claimed that there was a resolution dated 10-9-1992 by the Administrator, who functions as Managing Committee, to conduct the election. Learned counsel contends that the effect of the said resolution is that the Administrator thereby impliedly agree to treat all these 4668 persons whose admission to membership was declared to be illegal and without jurisdiction, as valid members. Such a contention was not raised before the learned Single Judge. But even permitting such a contention in this appeal, we find that there is no substance in the said contention, inasmuch as before the election is conducted, the Returning Officer has to publish a preliminary list under the Act, and naturally, he has not included these 4668 members in the final list. That shows that the Returning Officer has not treated these persons as having valid membership. Therefore, these persons were rightly excluded from the list in view of the order of the Administrator dated 21-12-1992, Ext. P4, which we have now upheld. From Para.10 of the judgment of the learned Single Judge, we find that in fact the Returning Officer has published a preliminary voters' list on 5-1-1993, and the said list has become final, and the final list has been prepared on 12-1-1993. P4, which we have now upheld. From Para.10 of the judgment of the learned Single Judge, we find that in fact the Returning Officer has published a preliminary voters' list on 5-1-1993, and the said list has become final, and the final list has been prepared on 12-1-1993. The election is scheduled to take place on 10-2-1993. In the circumstances, there is no infirmity in the order passed by the learned Single Judge. There are no merits in this Appeal, and it is accordingly dismissed.